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(Alliance News) - easyJet PLC said Tuesday it delivered a "solid" performance in the fourth quarter, continuing to perform in line with expectations.
easyJet shares were 5.1% lower at 1,113.80 pence each in London.
The budget airline said it saw "robust" customer demand, with self-help initiatives "driving outperformance" in passenger and ancillary revenue per seat.
As a result, easyJet expects headline pretax profit of between GBP420 million and GBP430 million - in the upper half of the airline's guidance range. In the year ending September 30, 2018, the airline recorded GBP578 million in headline pretax profit.
"Our cost performance remained strong and in line with expectations despite the difficult fourth quarter disruption environment. Our operational resilience initiative was a driving force behind the strong performance," the airline continued.
Chief Executive Johan Lundgren added: "easyJet has continued to perform in line with expectations, despite challenging market conditions."
Lundgren attributed the increased demand on the "disruption" seen at rivals British Airways and Ryanair Holdings PLC. British Airways is owned by International Consolidated Airlines Group SA.
IAG and Ryanair have spent the summer fighting with pilot and cabin crew unions, with Ryanair hurt by several strikes.
easyJet full year passenger numbers increased by 8.6% year-on-year to 96 million, with capacity growing 10% to 105 million seats. Load factor declined 1.4 percentage points to 91.5%.
At constant currency, annual total revenue per seat is expected to decrease by about 2.7%. Last year, the airline reported revenue per seat of GBP61.94. In the second half, however, revenue per seat is expected to see slight growth, an outperformance on previous guidance.
"Our implementation of initiatives in the fourth quarter to optimise yield has led to solid revenue performance with total revenue per seat at constant currency set to increase for the full year. We have continued to invest in operational resilience, with the programme successfully reducing the impact of disruption on our operations. As a result, we expect to report a fall in headline cost per seat for the year, excluding fuel at constant currency," added Lundgren.
Total headline cost is expected to rise by about 12% due to increased capacity, increased fuel costs and foreign exchange movements. At constant currency, headline cost per seat is expected to decline slightly, in line with previous guidance.
In financial 2018, headline cost per seat was GBP55.87.
easyJet said: "Despite a difficult disruption environment experienced in the fourth quarter, which included the impact of storms across Europe and the technical issues experienced at Gatwick airport, the operational resilience initiative was a key driving force behind the strong performance."
Total fuel cost for financial 2019 is expected to be GBP1.42 billion, up 20% from the GBP1.18 billion reported last year.
Looking ahead, easyJet said its 2020 first quarter forward bookings are currently in line with the year before. The airline also noted its capacity growth in financial 2020 will be at the lower end of the company's historic range.
Year-on-year capacity growth is guided for about 2% in the first quarter.
By Paul McGowan; paulmcgowan@alliancenews.com
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